As a trade-off for the New Deal policies and social programs to address the Great Depression in the U.S., the Home Owners’ Loan Corporation (HOLC) was allowed to make maps that “graded” regions into four categories (‘A’, ‘B’, ‘C’, and ‘D’). These grading schemes were on a large part built on the racial and economic demographics of the regions and were paired with documents recording the demographic details and determined “desirability” of the neighborhood by HOLC. The red markers, for ‘high risk,’ is where we get the term “redlining.”
These redlining boundaries and categorizations for which neighborhoods were deemed ‘high-risk’ for loans or other programs have deeply impacted the Bay Area and the broader U.S.
Zoom in to take a closer look or check out my interactive map to see the HOLC gradings on a closer tract level.
Interactive Map - HOLC graded regions by census tract
This map shows the 1937 HOLC Gradings of the “San Francisco,” “Oakland” and other East Bay city regions, and the “San Jose” region (other Bay regions were not included in the grading), merged with ACS 2019 census tract geometries.
HOLC Lending Risk Neighborhood Grading Scheme:
Grade A “Best”
Grade B “Still Desirable”
Grade C “Definitely Declining”
Grade D “Hazardous”
Neighborhoods deemed “Hazardous” or undesirable we communities made up of predominately African American, Immigrant (from Asian and South Europe), Catholic, and Jewish communities. The gradings corresponded with how lenders interacted with residents of these neighborhoods and by consequence have perpetuated cycles of discrimination and inequality in the Bay Area and beyond.
When looking at the maps of the HOLC grades from 1937, we can see many similarities to the contemporary racial and demographic information. About 80 years later, and the policy choices of late 1930s’ legacy is very much a reality that impacts the quality of life and discrimination faced by many in the Bay Area.
These maps show the percentages of people identified in the census race categories as “Asian,” “Black,” “Hispanic or Latino,” “Native American,” or “White” living in the different Bay Area census tracts. While the census also tracks other racial and ethnic categories, for the sake of the HOLC comparative analysis, these bigger categories will serve as the source of analysis and comparison to the HOLC gradings of different census tracts from 1937. Especially when considering the higher concentration of white households in these “A” grade neighborhoods still today, and the correlation with high concentrations of wealth, we can see the impacts of these institutionalized forms of discrimination that persist today. Zoom in to take a closer look!
This map shows the income percentage data as in the previous map as but with the HOLC 1937 gradings overlayed on the regions that were included in those redlining policies. Double tap on different regions to zoom-in and compare the gradings that were highly based on race and socioeconomic status in the late 1930s to the current day socio-economic breakdowns of the Bay Area.
For many Bay Counties, such as San Francisco, households making less than 100K annually are considered low income by HUD (U.S. Dept. of Housing and Urban Development). While this varies county to county, the Bay Area across all counties is quite an expensive place to live and making less than 100K annually can be considered lower income for this comparative analysis.
A 2018 study done by the National Community Reinvestment Coalition (NCRC) showed that 75% of neighborhoods HOLC “red-lined” in 1937 continue to struggle economically and are much more likely to have lower-income and minority residents. They also found that 90% of the areas graded as “Best” or [A] continue to have a high concentration of mid- to higher income and 85% remain predominately white.
The economically and racially discriminatory lending practices, especially for housing as codified by the HOLC mapping and grading, has perpetuated a significant racial wealth gap across the U.S., but especially in many of the neighborhoods and communities that were targeted as “Hazardous” in the first place. As John Taylor, President of the NCRC said, “Homeownership is the number-one method of accumulating wealth, but the effect of these policies that create more hurdles for the poor is a permanent underclass that’s disproportionately minority.”
The overt discrimination and residential segregation lost legal backing after the Fair Housing Act in 1968, but that did not completely end discriminatory practices or wipe out the inherited wealth gaps that persisted.
Not only was there an intense economic impact to these policies, these policies have other adverse effects that impact daily life in often unseen ways. The 2020 study “The Effects of Historical Housing Policies on Resident Exposure to Intra-Urban Heat: A Study of 108 US Urban Areas” by Jeremy Hoffman et al. found that historical discriminatory housing practices, such as redlining, may be responsible for disproportionate exposure of minority communities to extreme heat events especially in urban areas.
In this project, the equity analysis considering geographic mobility and income by race revealed disparities that have existed historically and persist to this day.
The inquiry made use of various census data to explore these issues quantitatively and qualitatively, demonstrating changes over time in median household income and house prices with connections to locations linked to Bay Area in-flows and out-flows.
My project compared contemporary racial and economic demographics to 1937 HOLC redlining gradings and risk scores. This comparison identified perpetuated cycles of inequality and disparity through discriminatory lending practices, geographic segregation, and overall income inequality for different racial groups.
Overall, my process demonstrates the complexities of racial and economic dynamics in the Bay Area. Although the Bay Area has had many big shifts in population, lifestyle, and industries, the legacy of race-based policies have deep-rooted and long-lasting impacts on the lives and wellbeing of those living in the Bay Area today.